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How Many States Are Really Opting Into ACA? Devil's in the Details

Wednesday, February 27, 2013

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How Many States Are Really Opting Into ACA? Devil's in the Details

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Same story, different week: A governor who opposed the Affordable Care Act changes course and announces plans to opt into the Medicaid expansion.

Supporters of the ACA rejoice, conservatives grumble, and a new number gets tacked on the board -- 24 states opting in, at last count.

Yet there's more to the story than governors' speeches. In at least eight of those states, lawmakers are warning that they may not go along with expansion plans.

Those legislative logjams -- and what governors need to do to circumvent them -- vary state by state , but the fights are falling out along party lines.

In Missouri, two GOP-led House committees this week voted down Medicaid expansion plans, despite Democrat Gov. Jay Nixon's pledge to opt into the measure last year. Republican lawmakers in Arkansas, Montana and Washington have similarly been skeptical of their Democratic governors' expansion positions. Meanwhile, four GOP governors who have backed the expansion are having difficulty corralling members of their own party.

"All the states are different," Matt Salo, executive director of the National Association of Medicaid Directors, told California Healthline. "But for all intents and purposes, you need the executive and legislative branches to agree."

GOP Legislatures Balk Over Cost, Risk

That basic civics lesson has been largely ignored as one governor after another announced plans to participate in the law's Medicaid expansion.

Proponents of the ACA have been particularly gleeful as several leading Republican governors -- Arizona's Jan Brewer, Ohio's John Kasich, Michigan's Rick Snyder and Florida's Rick Scott -- have come out in favor of the expansion across the past six weeks.

"The fact that [those Republican] governors have opted into the Medicaid expansion are game-changers," Ron Pollack of Families USA told California Healthline last week, after Scott's announcement.

"I think the dominoes are going to fall into place fairly soon."

Pollack's probably right. Scott's decision was especially significant, both for its practical -- Florida stands to insure one million more residents through the expansion -- and symbolic implications, given his status as a leading critic of Obamacare. And last week's announcement may well have given New Jersey's Chris Christie more cover on Tuesday to announce his own support for the Medicaid expansion.

But even if the game's changed for Republican governors, many GOP legislators within their own states continue to fight the Medicaid expansion using a well-worn playbook to criticize the law's costs and possible risks.

Arizona's House speaker: "We have no faith in the federal government" to fulfill its Medicaid obligations.

Florida's House speaker: "I am personally skeptical that this inflexible law will improve the quality of health care in our state and ensure our long-term financial stability."

Michigan's House speaker's spokesperson: "The federal government has a history of working with states to start long-term programs while providing short-term funding, and then sticking state taxpayers with the future financial liability."

Ohio's House speaker: "Our problem ... [is] if the federal government continues to operate the way it has the last several years, they may or may not have the money to live up to their obligations."

What Comes Next if There's a Split

Some state lawmakers appear unclear on what happens if the Legislature and governor differ on the Medicaid expansion.

"It would be a very legally interesting situation," Brian Kane, Idaho's deputy attorney general, testified at a committee hearinglast summer. "That's a very involved powers-of-government question, from my perspective."

But what it boils down to: The governors who favor the Medicaid expansion really can't move forward without their legislatures, which need to authorize and appropriate the necessary funds.

(Governors who want to expand Medicaid can make provisional arrangements to avoid last-minute scrambling, according to Salo. For example, they can work with vendors to have systems that are ready to operate under the expansion's expanded eligibility requirements if necessary, should the state move to opt in after all.)

Under the Supreme Court's ruling on the ACA, legislators can wait months or years to hammer out an agreement, if they want to opt in at all. But there's a significant financial incentive to reach a decision before the year's done.

The federal government's 100% matching funds are only available from Jan. 1, 2014 through Dec. 31, 2016, Salo noted. "And every month that you're not [part of the expansion] is a month that you're not getting that Medicaid match."

Legislatures May Be Playing Role of Token Resistance

That financial hook, which has swayed staunch conservatives like Scott and Christie, may ultimately end up winning over legislatures too.

(And if it seems like we've been here before -- well, we have. After considerable hue and cry, every state governor ended up accepting stimulus funds because the package was seen as just too good.)

The government also continues to sweeten the pot for holdouts; Arkansas Gov. Mike Beebe on Tuesday announced that HHS had approved an unusual waiver to allow the state to use federal funds to help residents buy private insurance.

Meanwhile, it's possible that the most critical legislatures may simply be going through the motions of offering token, partisan resistance.

Earlier this week, the GOP chair of North Dakota's House health committee warned the Associated Press that "the caucus [was] divided" on its upcoming vote over Medicaid expansion.

A day later, that divided caucus voted 12-1 to opt into the expansion.

Here's what else is happening around the nation.

In the States

On Saturday, Iowa Gov. Terry Branstad (R) said he has informed HHS Secretary Kathleen Sebelius that his state will not expand Medicaid because of concerns that the expansion "will either collapse or the burden will be pushed onto the states in a very significant way." Branstad said he pressed Sebelius for a federal waiver to continue IowaCare, a health care program that provides limited benefits to 70,000 low-income state residents (AP/Modern Healthcare, 2/24).

Intense lobbying efforts by health care stakeholders, particularly hospitals, might have influenced the decisions by seven GOP governors to participate in the Medicaid expansion. Hospitals agreed to Medicaid cuts under the ACA based on the assumption that those losses would be offset by more insured patients. Politics also likely played a role in the states as President Obama won all but two of those states in last year's election (Goodnough/Pear, New York Times, 2/21).

The Virginia General Assembly has reached a compromise to establish a commission that would authorize an expansion of Medicaid under the Affordable Care Act in the state, despite broad Republican opposition to an expansion (Vozzella, Washington Post, 2/22). GOP lawmakers on Monday argued that other major changes first must be made to the Medicaid program before the state moves forward with an expansion (Norman, CQ HealthBeat, 2/25).

On Monday, Republicans on two Missouri House committees voted unanimously to reject a pair of Democratic proposals that would have expanded Medicaid coverage under the ACA to an additional 300,000 low-income adults. One proposal would have allocated funding for the expansion in the fiscal year 2014 state budget and the other would have codified an expansion in state law (Lieb, AP/San Francisco Chronicle, 2/25).

In the Courts

Last week, 11 Republican lawmakers filed an amicus brief with the 10th U.S. Circuit Court of Appeals in support of retail chain Hobby Lobby's lawsuit against the federal contraceptive coverage rules under the ACA (Viebeck, "Healthwatch," The Hill, 2/20). The rules require that most health plans cover contraceptive services. The Obama administration proposed an accommodation for religiously affiliated employers that would ensure that their health plans do not have to pay for contraceptive coverage, but the accommodation was not extended to for-profit businesses, including Hobby Lobby (Howell, Washington Times, 2/20).

Inside the Industry

State and federal officials have cited Kaiser Permanente's focus on prevention, wellness, integrated care and use of electronic health records as a model for implementation of the ACA. In addition, the California Legislature recently picked Kaiser as a model for other health plans to follow when they offer products through the state's health insurance exchange (Craft, Sacramento Bee, 2/18).

Rolling Out Reform

A number of large private firms -- including Deloitte Consulting and Xerox -- have won multimillion-dollar contracts to build information technology infrastructure for federal and state health insurance exchanges under the ACA. For example, California has awarded Accenture a $359 million contract to develop infrastructure for its exchange (Galewitz, "Capsules," Kaiser Health News, 2/19).

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Published every Wednesday, Road to Reform updates federal and state efforts to overhaul the nation's health care system, focusing on key milestones, the politics and the players, and the roadblocks that remain.